The controversial Traveston Dam would be scrapped and replaced by a $1.2 billion desalination plant on Bribie Island under a Coalition government.

Opposition Leader Lawrence Springborg yesterday unveiled a new southeast Queensland water policy it is claimed would "climate proof" the region.The policy also included using recycled water only as a last resort and giving financial help for households, business and community groups to improve water efficiency.

Mr Springborg said the policy would guarantee the region had a reliable water supply sooner and cheaper than under what the Government was offering."Our innovative water strategy will maximise every drop of rain while embracing new technology and water sources," he said.

The Bribie Island desalination plant, which has been mooted as a future option by the Queensland Water Commission, would provide 125 megalitres a day by 2012.Under the plan, renewable energy would supply the plant, however the Opposition admitted the source of the green power was still unknown.

Land bought up for the Traveston Dam would be sold at market value, with former owners given priority.

The $727 million saved from building the desalination plant, rather than the dam and associated pipelines, would be pumped into water-saving schemes.They included a 15-year, $1.5 billion rebate scheme for installing a range of new waterwise technologies, along with traditional devices such as tanks.A fund of an unspecified size would also be established to provide financial assistance for large businesses, community groups and residential developments to install rain and stormwater harvesting schemes.

The Australian Conservation Foundation and Save the Mary River group welcomed the Opposition's proposal to support alternatives to Traveston Dam.

"Dams are an unreliable and outdated water supply option that destroys rivers and just don't make sense in the face of a changing climate," ACF's Amy Hankinson said.

However, Deputy Premier Paul Lucas said the Bribie Island desalination plan would produce much less water than Traveston and the recycling pipeline."What they have done is put a 300ML-a-day hole in our water supply," he said.

Mr Lucas said the desalinated water would also be more expensive, driving up household water bills.